Re: quick question on nonprofit status
Re: quick question on nonprofit status
- Subject: Re: quick question on nonprofit status
- From: email@hidden
- Date: Thu, 19 Feb 2004 07:44:23 EST
My two cents worth.
We asked the IRS for a 501(c)(7) and got a 501(c)(4). Almost the same
social group status. The only downside (and its minor) is that if we ask a
vendor
for a freebie, we MUST use the IRS language that donations are not
tax-deductible.
I like being protected by the blanket of incorporation.
Gary Kampel
President
www.pbmug.org
In a message dated 2/17/04 1:12:52 PM, email@hidden writes:
>
Let me share a bit more regarding the thinking we've put into this issue.
>
There's a much bigger issue to consider than just minimizing paperwork.
>
>
We met with our personal attorney, who happens to be the leader of a very
>
large soccer club here, to get his view. The central issue from the
>
attorney's perspective is PERSONAL LIABILITY PROTECTION for officers of the
>
club. As an officer of a club, it is our understanding that you are liable
>
for anything that occurs in the club, UNLESS the club is structured as a
>
corporation or non-profit.
>
>
Yes, it's easy to get a state Tax ID number. And, yes, it's easy to set up
a
>
bank account in the name of the club as a DBA. However... and we think
this
>
is a BIG HOWEVER... Don't kid yourself... your bank account is actually
held
>
in the name of an individual or multiple signers... whether it is a new
>
account or an old account. And that means you are personally liable.
>
>
If you are comfortable with the personal liability, then fine... end of
>
conversation. Might as well keep it as simple as possible. If you are NOT
>
comfortable with the liability and the potential consequences of being
sued,
>
then the alternative is to structure the clue as some kind of corporation
or
>
non-profit organization. It is our understanding that that is the only way
>
to protect yourselves legally as officers of the club.
>
>
Like it or not, we live in a country with a legal system where people seem
>
to feel entitled to sue anyone over almost anything... and are encouraged
to
>
do so by "Personal Injury" attorneys marketing their services. Just look
in
>
your phone book for the pages of ads.
>
>
Our conclusion is that we are NOT comfortable with the liability issue and
>
we are opting to form a non-profit despite the extra paperwork.
>
>
Regards,
>
>
Mac Carter
>
President, Whatcom Macintosh User Group
>
Bellingham, WA
>
>
>
email@hidden sent the following on 2/16/04 10:00 PM:
>
>
> Getting a tax ID number doesn't put you in any status. Just make sure
>
> that you at least have your user group registered with the state as a
>
> DBA, & use that name in the tax ID registration. If you register as
>
> non-profit, you don't need to supply any ssn number.
>
>
>
> So our status now is that we are registered as a DBA, have a tax ID
>
> number & don't plan on going non-profit unless we're forced to.
>
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